All variants of Tesla Model Y are eligible for the $7,500 US IRA EV credit. This was made possible by the recent reduction in the price of the car, which is now under $57,000, before the credit.
The Biden administration will allow more crossover SUVs to qualify for the newly revised EV tax credit after lobbying from automakers such as General Motors and Stellantis. The change, announced Friday by the Treasury Department, expands the number of buyers who can take advantage of the lucrative $7,500 consumer tax credit, broadening the definition of how a sport-utility vehicle is defined.
The change announced Friday matters because, under the Inflation Reduction Act, SUVs under $80,000 can get tax breaks, while passenger-car buyers get nothing if the car costs more than $55,000. The Treasury expanded the classification by using the Environmental Protection Agency's public-oriented Fuel Economy Labeling standard rather than the Corporate Average Fuel Economy (CAFE). Tesla lowered the prices of its vehicles enough that all variants of its Model Y became available for a $7,500 US IRA EV credit.
Starting in mid-January, Tesla Model Y is available from $53,490 for the base version and from $56,990 for the Performance version. Prior to the price cut, only the 7-seat Model Y was eligible for the $7,500 credit. The price cuts have made all versions of the car more affordable and made them an attractive option for a wide range of consumers who previously would not even consider buying Model Y due to its higher cost.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.